1. Field of the Invention
The invention relates to the human capital development framework, and more particularly to the framework's methods and systems for quantifying the maturity of human capital processes and the impact of human capital practices on visible company metrics.
2. Discussion of the Related Art
In many business organizations, human (employee) performance often has a significant impact on the organization's financial condition and even stock valuation. Financial analysts frequently treat human performance as an expense, rather than an asset, and thus investments in human performance are not properly valued. Some organizations utilize Human Resources (HR) scorecards to evaluate performance of an HR department. However, these scorecards are not helpful in determining whether companies are getting the optimal return on their investments in people. Benchmark databases are also utilized to provide insight on how much companies are spending on training, salaries, etc., but they do not offer much insight on where strategic investments can be made.
There is a desire for an improved methodology for measuring the impact of human capital investments and interventions on business results. Most executives intuitively know that people are key to achieving and sustaining performance improvements in almost any business area, yet they are unable to support their beliefs with empirical evidence. A significant impediment of effective intervention into the domain of human performance has been the lack of convincing evidence that human capital investments improve a company's financial performance. In many cases, organizations are investing in human capital without the ability to gauge the level of return on those investments. In particular, managers lack the tools and metrics to help them make intelligent investments in human capital and other value-creating intangible assets. Thus, it would be desirable to have a framework which allows organizations to quantify the relationship between human capital practices and the organization's bottom line.
Until now, no single study or approach has sufficiently explained the relationship between the two by linking a comprehensive set of human capital processes, the people-related outcomes or human capital capabilities related to these processes (e.g., employee engagement), intermediate key performance drivers and business results.